Kaushalam Foundation Vs CIT (Exemption) (ITAT Jaipur)
Subsequent Section 12AB Registration Removes Earlier Objections: ITAT Directs Section 80G Approval
Introduction
The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) allowed Kaushalam Foundation’s appeal against rejection of its application for approval under section 80G of the Income-tax Act, 1961.
The Tribunal noted that the foundation had subsequently been granted registration under section 12AB. It held that the objections underlying the earlier rejection of section 80G approval had become infructuous, having already been decided in the foundation’s favour during the section 12AB registration proceedings.
On the facts of the case, the Tribunal treated section 80G approval as consequential to the registration already granted and directed the Commissioner of Income Tax (Exemption), Jaipur, to issue approval in accordance with law.
Background of the Case
Kaushalam Foundation challenged the order dated 13 January 2026 passed by the Commissioner of Income Tax (Exemption), Jaipur, rejecting its application in Form No. 10AB seeking approval under Section 80G(5)(iv)(B) of the Income-tax Act, 1961.
The application had been rejected on grounds relating to its completeness, registration under the Rajasthan Public Trust Act, 1959, genuineness of activities and non-compliance.
Aggrieved by the rejection, the foundation approached the ITAT Jaipur. The appeal was heard on 8 October 2026 and the order was pronounced on 22 October 2026.
Grounds on Which Section 80G Approval Was Rejected
The CIT(E) rejected the application because Form No. 10AB was considered incomplete, the foundation was not registered under the Rajasthan Public Trust Act, 1959, and objections existed concerning the genuineness of its activities and compliance.
The Tribunal’s order did not independently examine each objection. Instead, the decision turned on the effect of the subsequent registration granted under Section 12AB.
Subsequent Registration Under Section 12AB
During the hearing, the foundation’s authorised representative produced an order dated 27 September 2026 granting registration under Section 12AB.
The registration had been granted after the rejection of the Section 80G application but before the Tribunal heard the appeal.
The Tribunal observed that the objections raised by the CIT(E) during the Section 80G proceedings had already been decided in the foundation’s favour while granting Section 12AB registration.
ITAT Holds Earlier Objections Had Become Infructuous
After hearing the parties and examining the record, the Tribunal held that all objections raised while rejecting the Section 80G application had become infructuous.
The Tribunal considered the subsequent Section 12AB registration decisive because the objections underlying the earlier rejection had already been resolved in favour of the foundation.
Direction to Issue Section 80G Approval
The Tribunal held that approval under Section 80G was consequential to Section 12AB registration in the circumstances before it.
Accordingly, the appeal was allowed and the CIT(E), Jaipur, was directed to issue approval under Section 80G in accordance with law.
Scope of the Decision
The decision rests on the specific finding that the objections supporting rejection of Section 80G approval had already been decided in the foundation’s favour during the subsequent Section 12AB proceedings.
The Tribunal did not independently determine the general applicability of the Rajasthan Public Trust Act registration requirement or separately adjudicate the earlier deficiencies in Form No. 10AB.
Final Outcome
The ITAT Jaipur allowed Kaushalam Foundation’s appeal and directed the CIT(E), Jaipur, to issue approval under Section 80G in accordance with law.
FULL TEXT OF THE ORIGINAL ORDER OF ITAT JAIPUR
The Appellants, Kaushalam Foundation by filing the present appeal, sought to set aside the impugned order dated 13.01.2026 passed by the Commissioner of Income Tax (Exemption), Jaipur [hereinafter referred to as the ‘CIT(E)’] on the ground that:-
“1. That the Ld. CIT(E), Jaipur, has erred in facts and in law by cancelling the application u/s 80G(5) for permanent registration.
2. That the appellant craves to add, amend, and alter the grounds before or at the time of appellate hearing.”
2. Briefly stated, facts necessary for consideration and adjudication of the issued at hand are : Appellant’s application moved in Form No. 10AB, seeking approval u/s 80G(5)(iv)(B) of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) was rejected on ground of incomplete Form 10AB, non registration under Rajasthan Public Trust Act, 1959 and non genuineness of activities & non compliance.
3. Being aggrieved with the impugned order passed by the Ld. CIT(E), appellant has come up before the Tribunal by way of filing the present appeal.
4. We have heard Ld. ARs for the appellant and Ld. DR for the Revenue and perused the record available on file.
5. At the very outset, Ld. AR for the appellant has brought on record the order dated 27.09.2026 passed by the Ld. CIT(E) for granting registration u/s 12AB of the Act. Now there is an appeal before the Bench challenging the rejection of appellant’s application u/s 80G of the Act. When registration u/s 12AB of the Act has already been granted to the appellant, all the objections raised by the Ld. CIT(E) while rejecting the application filed in Form 10AB seeking approval 80G(5)(iv)(B) of the Act have become infructuous, having already been decided in favour of the appellant while disposing off his application for registration u/s 12AB of the Act. Approval u/s 80G of the Act being consequential to the registration u/s 12AB of the Act, and appeal filed by the appellant is allowed and the Ld. CIT(E) to issue the approval u/s 80G of the Act in accordance with law.
6. Resultantly, the appeal filed by the appellant is allowed.
Order pronounced in the open court on 22-10-2026.
